While rumors that Libyan ruler Muammar Gadhafi had been shot surfaced, the Swiss Department of Foreign Affairs announced it would freeze any and all assets held by Gaddafi or his “environment” to avoid any “misuse of state funds.”

The move by Switzerland’s Foreign Ministry comes amidst increasing violence in Libya, a nation that has progressively appeared more isolated from the rest of the world. Unlike revolts in Egypt and Tunisia, the uprising in Libya has turned increasingly violent, with rebel forces fighting Gadhafi loyalists for control of the country’s cities. Escalating violence has rattled markets, especially oil markets, which had been on steep upward trends, punctured Thursday afternoon by rumors that Gaddafi had been shot. While it is unclear where the rumors came from, U.S. officials were quick to note that they had no reason to believe the Colonel was dead. (Read Egyptian Civil Strife Sends Oil [Brent] Close To $100 On Suez Fears).

UPDATE: British authorities have decided to seize Gadhafi's UK assets, more below.

Gadhafi, who accused Osama Bin Laden and hallucinogenic drugs for causing the violent uprising, saw his assets frozen by Swiss authorities in the same way as they had blocked the assets of Egyptian deposed ruler, Hosni Mubarak. (Read Mubarak's Swiss Accounts Frozen).

China’s Ministry of Foreign Affairs also released statements about the situation in Libya. Spokesperson Ma Zhaoxu announced in a press conference on Tuesday that “gangsters” had raided and attacked Chinese companies’ facilities in Libya. According to the FT, China’s largest oil company, CNPC, announced it had been a victim of such attacks. Other companies, including Spain’s Repsol YPF, France’s Total, Italy’s Eni, and others had scaled down or halted operations in the North African nation, with estimates that is 1.6 billion barrels of daily production had been scaled down to only 400,000 barrels.

Oil markets had been on a steep run-up as the conflict escalated, with WTI contracts briefly hitting the psychologically important $100 dollar mark on Tuesday and Brent almost hitting $120 early on Thursday. By 3:13 PM in New York, crude oil was trading at $97.24, down 0.88% or 86 cents from the session opening. Brent Crude, the international benchmark, was trading up 0.09% or 10 cents to $111.35 by the same time. (Read Halah Touryalai's take on Saudi Arabia's role in the crisis, Oil Prices Spike, Saudis To The Rescue?).

UPDATE: As stated above, it has been reported that Gadhafi's UK assets have been frozen by British authorities. According to The Telegraph, British Ministers have traced a 10 million pound ($16 million dollar) London Mansion back to Gadhafi, and have found an additional 20 billion pounds ($32 billion) in "liquid assets" belonging to the "Libyan regime."